Monday, November 11, 2013

More tales of health care cost and quality

An interesting article in the Wall Street Journal goes through the pros and cons of concierge medicine.  I’ll admit, my view of concierge medicine has been largely negative up until now.  Probably having to do with my being as confused as society is about whether we should treat physicians as if they have a special calling (saint-like) or as if they are business people with special skills (pro athlete-like).  Anyway, this article does convincingly make the case that concierge medicine isn’t just rent-seeking behavior but is actually value-creating in the economist’s sense for some people.  And ironically ObamaCare may have actually shored up the business case for concierge medicine.

The more interesting piece of the article was actually a tangential reference they made to a study from the North Carolina State University.  The study apparently reviewed the expenditures of the patients of a particular concierge practice and found that the longer office visits allowed by the concierge business model led to health improvements which ultimately decreased out-of-pocket payments (presumably through lower utilization of something – office visits?  medications?)!

Now, I realize that there is plenty of literature out there on PCMH savings, but the evidence still seems to be spotty and it’s still unclear from most of the studies whether the savings are net or gross savings, which is important because PCMH requires considerable investment to make the model tick.  And of course there’s the ground-breaking work of the Alternative Quality Contract in Massachusetts, which showed small but significant savings compared with controls, but again, the savings clearly are gross savings, not net of investments by Blue Cross and/or the participating providers.

The intriguing point about the WSJ reference is that the result suggests net value to both patient and provider.  Concierge practices are supposed to improve the quality of care – that’s why people join them.  In terms of who gains what, the common wisdom is that patients benefit through higher quality of care, and providers benefit from higher income.  In this case, both patients and providers seem to have gotten a financial gain -- the patient saved 12% out-of-pocket, and the provider has a profitable business and so is presumably better off than before.  It also seems that not only did quality of care improve, it improved by a lot because it resulted in lower utilization of some type of medical service.  I don’t think the WSJ reporter even had a clue that such a finding would be somewhat of a blockbuster if confirmed.  

I’ve contacted NC State to get a copy of the study – hopefully they’ll respond.

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